The peak body for NSW councils has blasted the government ahead of the verdict on which of them should merge, set to be delivered on October 16.
As the Independent Pricing and Regulatory Tribunal (IPART) prepares to hand its recommendations on which councils should amalgamate and which can stand alone to NSW Local Government Minister Paul Toole, Local Government NSW (LGNSW) said that the government had “stacked the deck” against councils.
LGNSW President Keith Rhoades said the government was demanding councils meet benchmarks for own-source revenue, which some councils could only achieve by increasing rates.
“The Minister accuses local government of greed, but it is his government that set the financial benchmarks councils are required to meet to be deemed Fit for the Future,” Mr Rhoades said.
“Councils were told they had to meet certain financial benchmarks – some of which were criticised at the time by a range of experts – and for some councils the only way to do so is to increase rates.
“That’s not because they’re poor financial managers – it’s the result of decades in which funding responsibility for infrastructure and services has been shifted off state government books and onto the shoulders of local government.”
The issue of funding is centre stage at this week’s NSW Local Government Conference in Sydney.
NSW councils have long argued that rate-pegging, cost-shifting and freezing the indexation of Financial Assistance Grants have constrained their revenues, while simultaneously slugging them with bigger bills for infrastructure and services.
Mr Rhoades said the key to strong councils was to overhaul the funding system, not press them into amalgamating.
“It’s a systemic problem which won’t be solved by forced amalgamations,” he said. “Forcibly merging two or more struggling councils just creates one big council with bigger funding issues.
“That’s why LGNSW has been arguing that real financial sustainability can only be achieved if we fix the funding first.”
The Fit for the Future process had been a “pretty transparent stitch-up” and the NSW government’s merger push was ideological, said Mr Rhoades.
He said that the state government had not provided good evidence mergers would benefit councils financially, apart from promising access to cheaper loans, which would still need to be repaid.
“The Government claims to want strong councils and strong communities, but refuses to address the systemic issues that have led us to where we are today,” Mr Rhoades said.
“The Minister is being incredibly duplicitous: using a longstanding funding problem as cover for an ideologically-driven move to increase control over local communities and neighbourhoods.”
Meanwhile, State Premier Mike Baird’s amalgamation drive is causing all sorts of problems for Liberal MPs, who fear a backlash from the branches that elected them and from the general public.
The prospect of amalgamation has also led to conflict within some councils, as well as some unlikely alliances.
Liberal councillors at Leichhardt Council, in Sydney’s inner west, originally proposed a merger with Canada Bay and Ashfield Councils as an alternative to the government’s recommended six-council merger, if the council could not stand alone.
While the motion was initially voted down, Liberal and Labor councils later voted for the motion and it was carried.
One thing is for sure, NSW council amalgamations are not going run smoothly for any of the parties involved.
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